We've talked endlessly about how silly this whole thing is from an economic and political economic POV. Taking those conclusions seriously one has to ask, "Who, and Why, is this going on?"

In my opinion, the answer is:

The euro was challenging and winning the battle against US dollar financial hegemony.  

Have to go back and compile a time line.  Off the top of my head the kicker was when Iran started accepting euros for oil quickly followed by "Euro Bad" headlines and then the Greece "crisis."

IF this is correct, and I've by no means proved anything, the major global financial institutions, possibly with support by various agencies and individuals in the US government, possibly orchestrated by the US government, have declared economic war on the EU with allies in the EU, notably the UK, but also various other, unknown to me, actors and entities within the EU as well as national governments comprising the EU.

I submit this hypothesis fits the data fairly well.  

Ever since I learnt about confirmation bias I've started seeing it everywhere

The following numbers aren't accurate but they are in the ballpark and demonstrate the point.

Look at it this way, instead of getting $1.5 million/year (boring) on your small amount of money, say $50 million, you can get $3.5 million.  If you're in the club you can now go to your friendly Central Banker and borrow $46 million on which you pay 2% interest based on the $50 million of sovereign 'assets' you're holding on your Balance Sheet.  (If you're not in the club you have to pay more, but the procedure is the same.) Admittedly you lower the total net return by $920,000 to $2.58 million but note you are still getting $1.1 million more than the 'original' investment by Company A.  Plus you are, effectively, getting that return on only $4 million ... manufacturing a 60% interest rate.  (If you had to pay a higher interest rate this return is knocked down, but you're still getting a whopping return.)  

And now Company B has $96 million on it's Balance Sheet (assets and cash.)

Company B sells OTC $75 million of bonds at 5% ($3.75 million/year interest) backed by the $96 million in "assets" it has on its Balance Sheet to Company A takes $50,000,000 of the proceeds and buys (boring) sovereign bonds at 3% getting the $1.17 million needed for the interest payment and a bit more.

voila!

Company B now has $71 million cash free and clear, a "profit," off of the original stake of $50 million.  

BONUSES ALL AROUND!

"Huh?" I hear you say.  "How can that be?"

The trick is done by being able to borrow at a low interest rate, buy at a higher interest rate, and iterate (leverage.)  Granted you have to have the $100 million needed to "make the wheels go 'round" but everybody, who is anybody has $100 mil to play around with!  Right?  

The other part of the trick is ignoring the unpleasant fact somebody, somewhere, actually has to go out and do something to get the money to meet the interest payments.  Since this whole thing is "fueled" by sovereign debt "somebody" is the taxpaying citizens and inhabitants of the country. When the sovereign debt is not used to generate an Internal Rate of Return higher than the interest rate there is a net flow of wealth, eventually, FROM the country TO the bond holders.  Doing things like funding a Real Estate Boom (Iceland, Ireland) or buying tanks (Greece) or bombing brown people (US) doesn't hack it.  So to get the money "austerity" programs must be instituted to pay the interest on the money the taxpayers and citizens of the country so foolishly borrowed.

 

Ever since I learnt about confirmation bias I've started seeing it everywhere

My response to the special pleading for 401ks is that the cure is an improved system of social security, not welfare limited to investors with bad decision skills.